In the last article,The Great Game in Central Asia, I highlighted the the extreme importance CARs (Central Asian Regions) hold for USA (and indeed for Russia and China too). However, it is USA that has plotted and planned the break up of Soviet Union for gaining the ultimate prize – access to gas in these regions. It is assumed that “anyone who controls the gas in Central Asian Regions, controls the world”.The huge gas reserves of Yolotan-Osman gas fields in Turkmenistan has increased the geopolitical importance of Afghanistan. USA is increasing its military strength – putting in an extra 30,000 troops by Mid 2009.

It seems US had only one plan – to keep the trophy of the Central Asian gas to itself. It was looking for partners who will support it in its logistical endeavour, as it was clearly in a land, far away from the mainland USA. With India having a cosy relationship with Russia almost through the 90s, and Pakistan providing the shortest pipeline route to warm waters of these Central Asian gas reserves, it was a no-brainer when USA supported Pakistan over India in geo-political and military matters. USA deliberately overlooked the Pakistani nuclear smuggling network, as its eyes were on the lucrative CARs gases and for that break up the Soviets was absolutely necessary. Pakistan provided the battleground to push the Soviets out of Afghanistan.

It is a fascinating story how Soviet Union was lured into Afghanistan for its ultimate break-up, the BEAR TRAP, but that is not for this blog.

Suffice it to say, the team of Rumsfeld, Cheney, Wolfowitz were active in oil & gas for much of their lives. These are the people who are / were in very senior positions in George Bush’s government. The names of “oil & energy” companies:Enron, Unocal, Halliburton are synonymous with Rumsfeld, Cheney & Wolfowitz – be it for employment, or for pipeline contracts while in government charge, contributions to Republican party, or even stock-options. Dick Cheney was even on the Kazakstan Oil Advisory Board. These were very interesting connections and again a thesis can be written but I am going to end here.

Add the name of Condolezza Rice to this trio – there was a Chevron oil tanker named “The Condoleeza Rice” prior to her taking charge of NSA in 2001.



While USA (with Israel) is now trying to bomb suspected nuclear sites in Iran today, in 1976 Defense Secretary Donald Rumsfeld and White House Chief of Staff Dick Cheney unsuccessfully lobbied for the construction of a nuclear reprocessing plant in Iran. The two men devised the scheme because, they say, Iran needs a nuclear power program to meet its future energy needs. This is despite the fact that Iran has considerable oil and gas reserves. The deal would be lucrative for US corporations like Westinghouse and General Electric, which would make $6.4 billion from the project.

The USA today wants to control the flow of oil & gas from Central Asian regions through its pipelines and the ports of its choice. It will not want to sell all to Western nations, but depending on good and “reciprocal” behaviour to Russia and China too. But the control of the gas will be vested with USA. Russia and China have other plans.

The earlier US Plan:

USA wanted a stable partner for Central Asian gas and it found one in Pakistan. After the Soviets left, the Taliban took over in due course. The Taliban was a creation of ISI. At that time, CIA & ISI were “brothers in arms” and things were on course. Unocal took over the de-facto USA plans for pipeline access from CARs through Afghanistan and onto the warm ports of Karachi.

The then US Assistant Secy of State for South Asian Affairs, ROBIN RAPHAEL went on to state – “The Taliban capture of Kabul is a POSITIVE STEP.”

Another senior US Diplomat stated : “The Taliban will probably develop like the Saudis did. There will be Aramco, pipelines, an Emir, no parliament and lots of shari’a law. We can live with that.”

On December 4th 1997, the representatives of Taliban were invited guests at the Texas headquarters of UNOCAL to negotiate support for the pipeline. Bill Clinton was the President and George W Bush was the governor of Texas at that point.

The US wanted Taliban to stabilize Afghanistan, wracked as it was in brutal infighting by warring tribes. The US wanted someone – anyone who can bring in stabilization for business to flow uninterrupted.

Unocal was to set up gas pipelines from Turkmenistan to Pakistan through Afghanistan. And Halliburton was to provide drilling services in Turkmenistan (Dick Cheney, the Vice President of USA, was the CEO of Halliburton).

US told Pakistan to use ISI and effect a change in Afghanistan – allow Taliban forces to take over and allow Unocal to start business. If that happens, the USA will recognise the TALIBAN government in Afghanistan.

Unocal Vice President John J. Maresca – (later to become a Special Ambassador to Afghanistan) – testifies before the House of representatives that until a single, unified, friendly government is in place in Afghanistan the trans-Afghani pipeline will not be built.

The US viewed the Islamic countries in CARs and Middle East as different states and it needed to be brought into a confederation of states – for oil to flow smoothly. Much like the United States of America, they will be called the United States of Islam. This would be akin to the Islamic Caliphate that the Islamists were dreaming of. US fed Pakistan the dream of taking over this Islamic Caliphate, after all it had the Islamic bomb and its military was running the show for Saudi Arabian air force and UAE too.

USA looked at the Islamic Caliphate as a giant oil MNC and Pakistan as the COO with itself as the CEO. However, Pakistan started thinking, why be the COO when it can become the CEO too?

USA too, soon realized that this United Islamic concept was simply not possible, the inner contradictions of these countries will not allow an Islamic Caliphate to take place. Also ISI started acting out of the confines and tasks given to it and started operating to the detriment of USA and Western forces (discussed before – like Somalia, Bosnia etc). In Bosnia ISI actions of arming Bosnian Muslims with top of the line anti-tank missiles brought upon USA wrath – Bill Clinton was going to declare Pakistan as a terrorist nation which was averted when Pakistan sacked ISI Chief Javed Nasir.

USA realized that the ISI has morphed into a different entity, spawning its own terror units for deniable operations that hurt the US. The honeymoon with ISI started turning sour. On the other hand, ISI moved with impunity across the globe, in Philippines, in South Asia, in Europe. See my article ISI & AL QAEDA.

9/11 changed the contours of USA plans. Sandy Berger, Clinton’s National Security Advisor, has stated, “You show me one reporter, one commentator, one member of Congress who thought we should invade Afghanistan before September 11 and I’ll buy you dinner in the best restaurant in New York City.”

Omar Sheikh Sayeed was the alleged person who wired the money to the attackers. There are insinuations that he is a British intelligence asset. The rationale for this stems from the fact that Omar Sayeed went to UK to meet his parents, twice, after being released by India in Kandahar air hijack, and he was not even detained at the airport. That he is under house arrest, is to deny him access to western media / intelligence agencies.

Whatever the truth – USA which had no reason to go back to Afghanistan, had one now. See also how the 9/11 commission covered up Pakistan and ISI’s role in 9/11.

Can USA attack its own country for a stated overseas military objective? If one looks at Operations Northwoods, one will be tempted to say : YES.


This document, titled “Justification for U.S. Military Intervention in Cuba” was provided by the JCS to Secretary of Defense Robert McNamara on March 13, 1962, as the key component of Northwoods. Written in response to a request from the Chief of the Cuba Project, Col. Edward Lansdale, the Top Secret memorandum describes U.S. plans to covertly engineer various pretexts that would justify a U.S. invasion of Cuba. These proposals – part of a secret anti-Castro program known as Operation Mongoose – included staging the assassinations of Cubans living in the United States, developing a fake “Communist Cuban terror campaign in the Miami area, in other Florida cities and even in Washington,” including “sink[ing] a boatload of Cuban refugees (real or simulated),” faking a Cuban airforce attack on a civilian jetliner, and concocting a “Remember the Maine” incident by blowing up a U.S. ship in Cuban waters and then blaming the incident on Cuban sabotage.

James Bamford himself writes that Operation Northwoods “may be the most corrupt plan ever created by the U.S. government.” Or was it the most corrupt?

ISI and Pakistan army, not satisfied with the Islamic Caliphate, wanted, dreamt and plotted about the break up of India with a 1000 cuts – see these two maps 2012 and 2020 Pakistan maps that was discussed in this article: GREATER PAKISTAN.

A broken India, if at all possible, will be a nightmare for USA in light of hostile Islamic regions surrounding USA if it were to stabilize its role in Afghanistan on one hand and contain China on the other. USA realised, a stronger INDIA is its better bet but not a VERY STRONG India.

USA meantime, too, realized that it had created a monster without the safety valve. ISI has morphed into an untamable monster with an appetite for global jehad and most importantly the means to do so too.

The Mumbai attacks of 26/11 will have dispelled doubts amongst the fence sitters about the intention of Pakistan. Hence these attacks definitely do not help Pakistan and the way the events have unmasked its terror nurseries. At superficial levels it helps Pakistan Army, only if the Indian Army started mobilizing its troops, giving Pak Army reasons to disengage itself from its disastrous military campaign against the Taliban on Afghan border. India, has so far, not played ball.

USA moves onto Plan B.

The Changed US Plan:

USA is not going to give up on access to Central Asian gas. If ISI and Pakistan was not playing ball, it would be made to play ball or it will break up Pakistan. Benazir assassination and the departure of Musharraf paved the way for a pliant Pakistan government, subservient to US.

The US is attacking militant hideouts in NWFP regions of Pakistan with impunity and under coercive diplomacy the Pakistan Army has to take care of militant hiding and operating from its territories. Attacking Taliban has been the biggest “nightmare” for Pakistan Army. As discussed earlier, Taliban was the brain child of ISIand it was made to create strategic depth in Afghanistan. Pakistan Army embedded its soldiers into Taliban – this fact can be easily ascertained from the huge Pakistan Army evacuation of Kunduz when Taliban was surrounded by Northern Alliance forces. Taliban who were supported and mollycoddled by Pakistan Army is up in arms against this “treacherous” role of the Pakistan Army, and this has created a civil war like situation within Pakistan. A situation ripe for working on the ethnic fault lines of Pakistan.

Ahmed Quraishi from Pakistan writes: As part of psych-ops, 40-feet wide billboards that have mysteriously sprung up on the main roads of NWFP showing the map of a new country – Pashtunistan – with meticulously defined borders that incorporate most of northwestern Pakistan. This ‘billboard campaign’ has to be the boldest statement of rebellion and separatism ever made in the history of nation-states anywhere in the world.

The deliberate destabilization of Pakistan through American military and political interference will result in turning large parts of the country against the federal government and increasingly draw the military into a civil war that will bleed us for decades to come in the presence of covert support from Afghan soil.

Ethnic politics, the new Trojan horse of anyone who wants to meddle in our affairs, have to be ended through legislation and by creating more provinces on administrative lines and by strengthening Pakistani nationalism. The question is: Who will do this? The current crop of politicians can’t. The military is not trained to do this, at least not alone. I am afraid we are soon approaching a situation where something will have to be thought of outside the box.

It’s either this or more separatist billboards in the future.”

This is the exact thinking of the Pakistan Army too. It wants to move its soldiers from Western borders of Afghanistan to the Indian border and it needed a reason to do so. The Mumbai attacks gave it a reason – hence one concluded that 26/11 was a Pakistani Army job.

Pakistan military strategists saw that instead of the original plan of becoming the CEO of the Islamic Caliphate the USA, together with India is now instrumental in making Pakistan a smaller entity. And there is no way, any self respecting Pakistani esp., its Army was willing to go down without a fight. Was 26/11 – a “thinking out of the box” strategy?



Whichever one ultimately comes about, the net loser will be Pakistan. And Pakistan Army, aware of this, wanted to pre-empt the plans. As I have said before, it was helped along as someone played into Pak Army’s insecurities.

Yes 26/11 it was indeed a Pakistani Army job, which contracted the work to ISI, which then sub-contracted the work to Laskhar e Taiba.

But how is this connected to the USA and its plans for the Central Asian gas and a greater plan for breaking up Pakistan today?

USA knows the visceral hatred the Pakistan Army and ISI has of India.It just needed to play along these fears.

In comes Michael Vickers with his vast contacts in Afghanistan and Pakistan especially with the Mujahideens. As stated before : Vickers was the principal strategist for covert CIA operations in Afghanistan that resulted in the defeat, and subsequent break up of the Soviet Union. If there is one man who can be credited for the break up of Soviet empire – it is Vickers.

His greatest influence was in the precise way he reassessed the potential of Afghan guerrilla forces and prescribed the right mix of weaponry to attack Soviet weaknesses.

At the height of Afghan operation, he was giving strategic and operational direction to 300 unit commanders, 150,000 full time and 500,000 part time fighters (“mujahideens”). He co-ordinated the efforts of TEN countries and oversaw an annual budget of US $ 2 billion.

Presently, Special Operations Command (SOCOM) which is part of the portfolio that Vickers handles is based in Tampa, FL. It’s annual budget is US$ 8 BILLION and more than 60,000 covert and overt personnel are on its payroll. Vickers also sits on 3rd floor of Pentagon “C” Ring.

Is Pakhtunistan Michael Vickers’ parting gift for his Afghan Mujahids? Only time will tell.

A sudden spurt of US spies (special operations group_ have been reported in the past one year in Baluchistan and FATA areas. There are “declared” US spies who run operations together with ISI, but these were covert spies operating out of the ISI ambit in Pakistani territory. Was Jude Kenan, an American caught in FATA, one such covert operative?

In August 2007 a representative of the jihadi outfit – a burly man in mid thirties with medium-length, thick beard met an American in Sadabahar who was dressed like a Pushtun. The meeting lasted more than three hours and the jihadi left with a canvas bag full of cash.

The American could not be identified but the jihadi was traced to a splinter group of LeT (Lashkar-e-Taiba). As is known, LeT is not a single entity; it is more like a brand name, used by many groups with diverse objectives and split loyalties.

The jihadi went to Karachi and met a colleague in Shah Faisal Colony and apparently gave him some of the cash he received from the American in Quetta. This assumption is based on the fact that the jihadi’s colleague in Shah Faisal Colony purchased a flashy SUV a few days later. And Benazir Bhutto was assassinated a few months later (direct connection not established that it was this money that was used, but people in the know state that this is so).

Again, this LeT is involved in the Mumbai blasts. Let us look at LeT from a different angle.

In 1988, Abu Abdur Rahman Sareehi, a Saudi and a deputy of al-Qaeda leader Osama bin Laden, founded an organization in the Afghan Kunar Valley which recruited Afghan youths and Pakistanis in Bajaur Agency to fight the Soviets. Sareehi was the brother-in-law of Zakiur Rahman Lakhvi, (ALLEGED MASTERMIND OF MUMBAI 26/11 ATTACKS) now named by the US Treasury and the Security Council as chief of operations for the LET. Seed money for the training camps was provided by Bin Laden.


Mahmoud Mohammad Ahmed Bahaziq, (described by the US Treasury as the main LET financier in the 1980s and 1990s and now named by the Security Council as a terrorist) was a Saudi intelligence proxy planted in the network.

He built up his influence in the network with Saudi money and eventually established Markaz Dawa wal Irshaad. The name related to a renowned Saudi office for preaching Islam.


This organization was then COMPLETELY HIJACKED by Saudi intelligence and the CIA and later operated under the name Lashkar-e-Taiba (LeT). To be fair to USA & RSA (Repuplic of Saudi Arabia), their intention was more to infiltrate the LeT than to use it for terror purposes.

CIA and Pakistan establishment never went after LeT – as LeT never attacked Pakistan and any US interests. The ban on LeT waslaughable at best.

After the September 11, 2001, attacks on the US, it renamed itself Jamaatut Dawa and clearly distanced itself from al-Qaeda.

The above statements are all facts. There is a connection of LeT to CIA & Saudi intelligence. There is a connection of LeT to Mumbai blasts. LeT was infiltrated by the CIA and RSA (Saudi) intelligence. What can this mean?

The 10 terrorists that attacked Mumbai were supposed to go to Kashmir. The ISI forward station head in Karachi and Zakiur Rahman Lakhvi changed their destination to Mumbai. Why was this done and under whose orders?

Russia stated that Dawood Ibrahim’s drug money was used in 26/11. Dawood is listed as the top 3 drug barons of the world by USA. And India recently said, it is more interested in Masood Azhar than Dawood Ibrahim – is this not strange?

Hamid Karzai’s brother is the largest drug baron in Afghanistan.And Afghanistan produced 6000 tons of opium in 2006, 8200 tons in 2007 and 7700 tons in 2008. On average, the world demand of opium-based narcotics, including heroin, is only half of this production. Where is the rest of opium going?

American forces – this includes all kinds of Americans such regular forces, CIA, Socom and contractors – have been buying and storing all the surplus opium. (See the movie American Gangster to figure out US military complicity in narcotics trade).

This report gets credence from the fact that about 70% of all opium production in Afghanistan comes from Helmand province, an area under the direct control of the Americans.

What would the Americans do with all this opium?

Experts are of the view that this opium, in raw or refined form,would be spread in the neighbouring countries (Pakistan, India, Iran, Central Asia and China). Some of it would go to Russia also.

This would bring several advantages to the Americans:

1. By increasing drug addiction in target countries, Americans would sap the economies of these countries and produce the generations of junkies that would be long-term liabilities for their countries;

2. If the opium is mostly consumed in the neighbourhood, less of it would be left for export to the American markets;

3. Narcotics are a traditional source of additional revenues for the American forces, especially the CIA. However, in this case, the US is not making money as it is subsidizing sales in CARs, INDIA, PAKISTAN & RUSSIA for a “different” reason (explained in points 1 & 2 above).

The suspicion that the American want to spread drug addiction in the neighbouring countries is also supported by the fact that even though the ‘farm-gate’ price of opium has remained stable at nearly US $ 70 per kilo, it is becoming available in the neighbouring countries at around US $ 40 per kilo. Clearly, the Americans are subsidizing the export.

Coming back to Pakistan, the latest NIE (of USA ) describes Pakistan as – No money, no energy and no government.

If USA now wants to break Pakistan, it cannot do so alone. There has to be military participation of India to break Pakistan’s strong army. Someone has to play the game for USA and that attack on Mumbai can be looked at that game changing scenario that broke the stupour of Indian politicians and let it be aligned with Indian Army’s vision which matched the US vision for the region.

USA wants to de-fang Iran but is in no position to do so itself. It has to show as an existential thereat to Israel and Israel will then attack Iran alone.

USA wants to India to tackle Pakistan and Israel to tackle Iran.

The next game changer will either be an attack inside India or more likely an attack within USA that will fast forward the military option and pincer attacks on Pakistan from two fronts.

My point – even if USA was involved in 26/11, albeit in a circuitous way, it has done India more good than harm. (Some commentators may disagree, but its ok – this is after all a view).

While India should be aligned with the short term vision of USA today, it is the long term vision of USA that India needs to be wary of. Before looking at these long term visions, USA has showed India two cards it will not hesitate to play, should India not play along with USA in these plans:

1.Open the Kashmir card – which US alluded to, it might do by sending Bill Clinton as a special representative

2. Last week of September 2008, USA brokered a meeting in Mecca. King Abdullah of Saudi Arabia hosted the talks between the Afghan government and the Taliban militant group, according to a source familiar with the talks.

India, together with Russia and Iran pumped in money and armaments to Northern Alliance force that fought the Taliban in Afghanistan. Any talks with Taliban will raise the hackles of these three countries.

Obviously, both the above options have “deadly” consequences for India. And India will see to it, that the above two do not come about. And US knows that it will continue to prick India with these uncomfortable situations to bring it “in line” to its game plan in the Great Game.


Mushahid Hussain, General Secretary of Pakistan Muslim League (Q) and chairman of Pakistan’s Senate Foreign Relations committee made the following statements about the current Indo-Pak relations, in Indian Express: – a few of his comments:

1. I feel American clout in the region has weakened. America as a superpower is not all that powerful. Now there’s a resurgent Russia, a rising China, emerging India, a stronger Iran and Pakistan is a regional power. But among our political and military elite, there’s infatuation with America. Still, the Americans told us to join the war in Iraq, we refused. They opposed the Iran pipeline, we didn’t agree. We recognize the Hamas government in Palestine, they don’t. We made the bomb despite American opposition. We have close relations with China despite American opposition.

2. Pakistan’s future is linked with China. The 21st century will be an Asian century. For me, the interesting question is: which way will India go? Will it play the role of the frontman for USA against China or will it go with the tide of the Asian century?

The contours of Mushahid’s statements cannot be more “clearer” – which is also the Pakistan military view. Pakistan is at the cusp of moving from American arms into the waiting arms of China – lock, stock and barrel. A fact, that will not at all go well with the strategic planners in USA.


The US military is burning nearly 600000 gallons of fuel per day. More than 80% of this comes from Pakistan, through 700 or so road tankers that are vulnerable to all kinds of attacks on their long journey from facilities in Pakistan to American bases in Afghanistan.And ISI has increased the attacks to these NATO convoys through Taliban in their depots in Peshawar. However, there are people who say that these attacks on NATO convoys are the work of Taliban who are carrying out orders from non-ISI masters (whatever that means).

The reserves in Afghanistan will suffice for only two weeks if the supply line is disrupted.

Aware of this, the Americans have been trying to create an alternate route through Azerbaijan, Turkmenistan and Uzbekistan. Even if the alternate route is opened fully, it is very long and inefficient and there are risks that Americans are not in a position to counter at present.

There is need to abandon the Pakistan route but there is nothing to replace it.

Benefits of bifurcating Pakistan: From American point of view, there are many benefits in creating an independent Balochistan:

1.An independent Balochistan will be an ideal territory to keep supply lines open to the US and NATO forces in Afghanistan.

2.Independent Balochistan will provide Americans with excellent locations for putting up their military and naval bases to police the Persian Gulf and make sure that no other naval power including India, China and Russia ever gets upper hand in the Indian Ocean.

3.An independent Balochistan will be the place from where Americans can maintain permanent pressure on Iran, even in the remote possibility that they may have to eventually leave Iraq.

4.China and Russia will be denied any access to the warm waters of the Indian Ocean.

5.The Gulf countries will remain dependent on the USA for export routes of their hydrocarbon products.

6.Full control of the entrance to the Gulf will enable USA to allow or deny oil flow by tankers to any country in the world.

7.Central Asia is a land-locked region and the whole region would be on the mercy of the United States.

If Balochistan is detached from Pakistan, the rest of Pakistan is likely to exist as a perpetually unstable entity, creating a permanent source of trouble for India. This fits nicely with other American plans because India has come very close to becoming an economic rival of the United States.


1. One logical consequence is that India and Pakistan would probably go to war or at least move their forces to the borders in a position of war readiness. Every expert knows that keeping forces ready for war is nearly seven to eight times more expensive than keeping them in the barracks. This is an excellent way to make sure that Indian and Pakistani economies would be crippled for a long time to come.

2. India and Pakistan are negotiating for two gas pipelines, one from Iran and the other from Turkmenistan. There are also plans to put oil pipelines from Kazakhstan and Uzbekistan to South Asia. USA would use every method to deny India the energy resources of Central Asia and IranIndia is not what USA has in mind. The tide has reversed already and it is not to the liking of the Americans. Students from the United States are now coming to India, Indian businessmen are giving tough time to American corporations worldwide, and India has entered some of the export markets that were traditionally dominated by the west. In short, a weak India will be acceptable as a friend but a strong India will be a pain in the neck for Americans.

The game changers and the current situation sits well with the Neo-Cons who have ensured that Obama is tied to the events and plans as envisaged by the Neo – Cons.

Obama has kept Robert Gates as defense secretary. And Bill Richarson comes in as Energy Secretary – the same Bill Richardson who as US Ambassador to the UN in 1988 met the Taliban officials in Kabul (illegally as US did not recognize the Taliban as legitimate Afghanistan government) – all for pipeline through Afghanistan. Which means – under Obama – Afghanistan policy will not change.

MICHAEL VICKERS in 2006 said: “Again, Pakistan is a critical ally in the war on terror, but life’s not perfect. But again, what’s the alternative—invade the Northwest Frontier Provinces? Good luck. You know—and so there’s a—you know, there’s a time and place.”

The time is now INDIA – it is NOW!

However, Pakistan feels at most India will precision bomb the terrorist training camps (which are anyway emptied out) in POK and nothing more. All this “bravado” that Congress is showing isonly for elections that are due in 2009 to steal the thunder from BJP. Are they correct?

MY 2 CENTS WORTH : This article to show the importance of USA and how India must hedge its bet in the Great Game. The villain is not USA, it is PAKISTAN. Pakistan attacked because it wanted to. Pakistan’s aims and designs on India remain the same – To bleed India by 1000 cuts and use home grown “jehadis” for terrorism. Mumbai attacks have opened an avenue for Indian military action – let us not shy away from this moment. CARPE DIEM – SIEZE THE DAY. JAI HIND!

(CLICK ON THE MAP FOR AN ENLARGED VIEW). This map is drawn by an American, so please excuse their lack of knowledge of the map of J&K. If I were to remove this map, on the basis of this serious error, I will not be able to present their plans to you – the detailed NATO bases. Also you will have noticed the derogatory term used “hillbillies” which connotes to people who dwell in remote “mountainous” areas. (earlier referred to American Indian tribes of Appalachia and Ozarks).




The world needs energy and hence we have the term “energy security”. For the longest time, energy meant OIL. Well, that is changing now – to OIL & GAS, and then onto Renewable energy, Solar energy, Wind energy et al.

Today we are the initial cusp, where we are moving from OIL based energy dependence to a Gas based energy dependence. A few countries have made the leap, but globally we are at the inflexion point.

Why this shift ?

Oil has a finite supply and that supply is on the verge of coming to an end. According to the Energy Bible : BP Statistical Review, at current levels of production, Oil reserves of –

1. Saudi Arabia is projected to last only 66 years
2. Iraq & Kuwait is projected to last 100 years
3. India, Australia, Italy, Brazil is projected to last 21 years.

In contrast to the dipping oil reserves, the gas reserves are growing as new findings are being made. Cars which are running on gasoline (petrol) and diesel will be run on Auto LPG, CNG etc and these are all gas derived. Subsequently these cars will run on hydrogen and even on Compressed Air (Our very own TATA NANO). Industry, home etc will make this shift as pipeline infrastructures are put in place.

Currently the largest gas reserves are in Russia with 48 TCM, followed by Iran with 28 TCM. However, all this is changing and will continue to change. With the discovery of Yolotan Osman gas field in Turkmenistan in October 2008, the gas equation and dynamics have changed. Preliminary indications are the gas reserves in Turkmenistan is around 38.4 TCM – far more than Iran and just 20% lower than Russia. And this means immense geopolitical movements around this neighbourhood.

It is to be understood, gas needs to be extracted and then moved over pipelines, some running over thousands of kilometres to reach its ultimate destination. Mostly the end destinations are ports – from where super tankers carry their cargoes around the world. Getting hold of gas fields in not enough. Hence, it is also a game of getting hold of “warm water ports”. The major players in Central Asia are Russia, USA and China.

Let us look at the map of Central & South Asia.

Turkmenistan is atop Afghanistan & Iran and this Yolotan Osman gas field is just near the Afghanistan – Turkmenistan border. Other than this, for other gas fields too, Afghanistan is of extreme importance – pipeline infrastructure to warm ports – hence USA will be embedded in Afghanistan for “generations”.

Central Asian nations were part of Soviet Union and the breakup of Soviet Union was the handiwork of USA whereMICHAEL VICKERS played a sterling part in arming and training the Mujahideen from bases in Pakistan. The goal – Access to Central Asian gas reserves, maintaining its superpower status etc etc.

The other major concern for USA is to keep both Russia and China out of the gas reserves of Central Asia. And also ensure that India and Russia do not join hands with Iran (USA remembers Northern Alliance).


And most of this Gas is located in a place called Central Asia. The access to this by major global powers has been romantically called “THE GREAT GAME” – to get a toehold to the supply lines of Central Asia GasAzerbaijan was the true success story of US oil diplomacy. Clinton literally snatched it from Russian orbit in the 1990s by pushing through the Baku – Tbilsi – Ceyhan (BTC) pipeline against seemingly impossible odds. The pipeline meanders from Baku (capital of Azerbaian) to Tbilsi in Georgian and then onto the Turkish port of Ceyhan. From here gas is filled in super tankers and shipped to Europe for consumption.

BTC completely bypasses Russia and this was the main purpose of this line.


The other important pipeline for the USA is the Nabucco pipeline. However, question marks have appeared regarding the future of the Nabucco gas pipeline, which, if constructed, would bypass Russian territory and bring Caspian gas from Azerbaijan via Georgia and Turkey to the European market. What if Azerbaijan accepts the Russian offer to buy gas at “European prices”? Has the Caucasus conflict fatally hurt Nabucco’s prospects? It seems, for the present, it has.

Europe has pinned its hopes on Nabucco, but it can only be implemented with Russian participation and also Iran. Nabucco is a serious threat to the Russian “South Stream pipelines” that feed Europe.


USA was planning and plotting and came to the conclusion that it has to make BLACK SEA into a NATO LAKE. If you look at the map of Central Asia, notice that other than Russia the other 2 countries of ex-Soviet Union that skirt the Black Sea are Ukraine and Georgia. And guess, who have been offered NATO memberships – you guessed it right – Ukraine and Georgia.

However, Russia remains vehemently against this NATO intrusion into its former republics and has made its opposition very clear. USA overplayed its hands in Georgia and gave Russia the chance to kill two birds with one stone.

Georgia has two breakaway provinces – Abkhazia and South Ossetia. It has majority Russian population. The Georgian maverick President Mikhail Shakashvili, under direction from his US experts, started bombing these two provinces to take them over by force.

Russia just drove in and in deft military manoeuvres took control of these provinces. Russia annexed these two provinces, and thus took de-facto control of two major Black Sea ports of Sukhumi & Poti. This was a great tactical blow to USA, because with this single Russian manoeuvre, the US dream of making BLACK SEA into A NATO LAKE was LOST – probably FOREVER.

There were reports that Israel wanted to use bases in Georgia to attack Iran and one of Russia’s aim was to pre-empt that. Interesting to note – Israel got wind of the Russian attack a week before the attacks and left Georgia with its advisers (note: USA stayed behind). The Israelis went to Russia and admitted that arming Georgia was a mistake and implored Russia NOT to arm Hezbollah and Iran with sophisticated armaments and missiles.

Germany came running to Russia and told them that they will block Ukraine’s and Georgia’s entry into NATO and this is exactly what they did – together with France. Germany, scarred from WWII memories of Russia and currently dependant on gas sales from Russia is in no position to take on Russia, nor is there any inclination to anger the Russian bear.

Condoleeza Rice came out defeated and admitted, “Georgia and Ukraine are not ready for (NATO) membership. That is very clear”. Russia won through coercive diplomacy.

Russia also sent a message through this military move to all its former republics, to take cognizance of Russian interests while plotting their gas sales – which have all been duly noted.

Central Asian republics all saw that USA is actually in NO position to militarily help them – Georgia was a case in point.

Russia deftly followed this by meeting Syrian President Assad and getting the port of Tartus as a resting place for its Black Sea maintenance quarters.

With a series of further moves, Russia has made USA nearly redundant in the Caspian region. Russia is flush with funds, and the economic might of USA has taken a serious beating in the economic crisis.

Russia has re-negotiated to buy gas from Uzbekistan and Azerbaijan at prevailing “European prices” thus raising the bar.

The four Russian oil majors had asked Putin for $ 80 billion package to pay off their foreign debts and finance strategic projects. Putin responded by saying that the government will disburse upto $ 50 billion.

How many Western governments can match Russia providing such backing of sovereign wealth funds to its oil majors at the present time of global credit crunch?

Moscow offered $4 billion loan to Ukraine for establishing two nuclear power plant in its western region. This is despite the pro-US stance of Ukranian Victor Yushchenko.

Also, there is huge political symbolism when Iceland expresses “dissapointment” with the Western world and turns to Moscow for a 4 billion Euro ($ 5.5 billion) loan to salvage its economy from imminent bankruptcy.

Such images make a lasting impression on the Central Asian steppes.

Russia with its vast deposits of oil and gas is already an energy superpower. And unlike Iran and Venezuela, it does not subsidize its economy from the oil proceeds – hence with the oil price down, its economy is still strong unlike those that of Iran and Venezuela. The EU is heavily dependant on Russia for gas imports and this dependence is expected to increase further as a result of declining offshore production of North Sea.


Currently there are 3 major pipelines running from Baku (capital of Azerbaijan). 2 are US sponsosred – the BTC pipeline and the Baku – Supsa pipleline (Supsa in Georgia). The 3rd one is the Russain pipeline : Baku – Novorossiisk pipeline. SEE MAP ABOVE.

Azerbaijan is negotiating with Russia to increase the annual capacity of the Baku – Nvorossiisk pipeline. At the same time Azerbaijanis reducing its commitment to the US sponsored Baku – Supsa and BTC pipelines and this is a major breakthrough for the Russians. Azerbaijan understands the Russian resurgence in southern Caucasus and Baku’s new interest in the Russian pipeline stems from a desire to protect its relationship with Moscow.

The implications are very serious for Washington. Any reduction in the Baku export through BTC could impact the viability of the pipeline which has been the cornerstone of US diplomacy in the region, pumping nearly 1 million barrels of oil / day from Azerbaijan to Turkey’s coast from where it is shipped to Europe. BTC, though secure now, has come under the watch of the Russians.

In September 2008, Uzbekistan and Russia agreed to build a new pipeline with a capacity of 26 to 30 billion cubic meters (bcm) annually to pump Uzbek and Trukmen gas to Europe. Such a pipeline will again undermine the US efforts to pump trans-Caspian energy routes bypassing Russia.

On top of this, neither Azerbaijan nor Kazakhstan appears interested in US entreaties to re-route energy exports bypassing Russia. Both hope to maintain good relations with USA but that cannot be done by picking a quarrel with Russia.

It seems the US phrase – “either you are with us or against us” is not finding any takers in Central Asia. Central Asian countries would do business with both but not at the expense of Russia and this rankles the USA as it has clearly fallen from the high “horse” they thought it was in.


At the same time China is anxious to get its act together and bind its energy security in this region. It has formed SCO to cement its energy needs in this region which the US is vehemently trying to push out. China knows that it cannot match US power for at least the next 15 years and its naval forces are no match to the US fleet and even the Japanese fleet. Hence it is going out of its way to get to the Central Asian gas reserves through land routes, even though many of them look unviable at the present time.

One of the better tieups will be to tag along the Russian ESPO pipeline. Russia is expected to complete this East Siberia to Pacific (ESPO) by 2012 for routing oil to Asian markets. Kazakhstan’s state oil pipeline operator KazTransOil is interested in transporting Kazakh oil through the ESPO. To note – Astana has shown no hurry to commit Kashagan oil to the US sponsored BTC pipeline but has committed to the Russian ESPO pipelines. US influence has truly reached its nadir in this region.

Unlike the USA or Russians, the Chinese have their own method of doing business overseas. Being a mercantilist and free of moral and political constraints, it hopes that it will continue doing what it loves best – making money. Chinese hope to sell cheap DVD players and exotic Chinese prostitutes, build roads and docks and in the bargain – gobble up Central Asian energy.

Washington is clearly nervous that Kazakhstan is showing alarming signs of shifting towards Moscow. All early investments by the USA in this region has come to naught. Astana supported Russian action in the Caucasus and cut down its investment in Georgia.

Clearly the Russians and Chinese have outmanoeuvred the American in Central Asia stakes.


We had touched earlier on the fact : Preliminary indications are the gas reserves in Turkmenistan is around 38.4 TCM – far more than Iran and just 20% lower than Russia (largest gas reserves in the world). The British consultancy company Gaffney, Cline & Associates (GCA) presented the first results of its audit of Turkmen gas reserves.

The biggest gas field discovery was in October 2008 – called the Yoloten Osman deposits. It is located near the Afghan – Turkmenistan border.

Turkmenistan has contracts to supply Russia with 50 bcm annually, China with 40 bcm and Iran with 8 bcm annually. The Russian energy giant GAZPROM requires this Turkmen gas to meet its export obligations in the European market, which accounts for 70% of the its total revenue. Gazprom sells 2/3 of Russia’s 550 bcm annual gas production in the rapidly growing domestic market. This compels it to secure Turkmen supplies to meet contracted European demands.

Looks like Russia is all set to gobble up gas supplies from Turkmenistan – but look again. Gazprom’s agreement with Turkmengaz DOES NOT INVOLVE YOLOTEN – OSMAN reserves.

Russia thought it held in its hand a chimera when it fancied that the July 25th Agreement put GAZPROM in charge of all of Turkmenistan’s exports. Surely, this is proving to be a misconception of Himalayan proportions.

USA has deftly moved in to claim its stakes on the Yoloten-Osman gas reserves and for Russia the game starts again.

Take a look at the map. USA is well places in Afghanistan and can easily draw pipelines from Yoloten-Osman gas reserves through Afghanistan. And after that, it needs a warm water port to load it on super tankers.

The only viable ports are Karachi in Pakistan and also Gwadar port in Baluchistan area of Pakistan. Pakistan has built Gwadar with Chinese help to serve several purpose and one of them was access to Central Asian oil. USA is in no mood to see that this happens. Gwadar may well become the Chinese naval base in future and have eyeball to eyeball confrontation with the US naval fleet.

The other port is Chabahar in Iran. This has been built by India. Look how close the ports of Gwadar and Chabahar are.

We must not forget this part :

When Afghanistan was under the control of Taliban, USA was willing to shake hands with the devil – just to get access to pipelines through Afghanistan. UNOCAL the US company in the thick of pipeline planning through Afghanistan, was acting as the unofficial lobby for the Taliban and they were regularly briefed by CIA and Pakistan’s ISI.

The then US Assistant Secy of State for South Asian Affairs, ROBIN RAPHAEL went on to state – “The Taliban capture of Kabul is a POSITIVE STEP.”

Another senior US Diplomat stated : “The Taliban will probably develop like the Saudis did. There will be Aramco, pipelines, an Emir, no parliament and lots of shari’a law. We can live with that.”

We must not lose sight of these statements. These are not statements of two individuals – they represent the USA mindset.

The USA will have tolerated Taliban and Shari’a just to get gas pipelines and this approach has not changed. USA tolerates the Saudi emirs. It may be a democracy itself, but in matters of business, it follows only one policy – “ANYTHING GOES” as long as its interests are met.

USA is looking for any stable partner that will guarantee it “peace” to “do business” in Afghanistan. Hence, for India, this becomes very important – Who will guarantee this “Peaceful business environment in Afghanistan”?

Will it again be Taliban + Pakistan or will it be Pushtuns + Balochis through independent countries created out of parts of Afghanistan and Pakistan?

If the USA game plan is the former – Taliban + Pakistan, we must ensure that this never comes into being. This will be disastrous for India. The latter, we can deal with and we will come to this part in the next article.

The Central Asia as it will look in the future. Afghanistan will play a pivotal pipeline role.

India too has legitimate energy concerns but USA will see to it that the Iranian – Indian gas pipeline or even the TAPI (Turkmenistan, Afghanistan, Pakistan, India) does not come into being.

The US with its dipping wealth and high levels of corruption is unable to stake claim of any sort in Central Asia. It is clutching at the straws with BTC and Nabucco pipelines. It will surely seek to leverage its presence in Afghanistan on the Yolotan-Osman gas fields to salvage pride and standing in the region.


USA is not going to give up without a fight. The attacks of NATO supply trucks recently in Pakistan has given planners in Washington time to formulate alternative strategies. The US has begun working on an entirely new supply route for Afghanistan which steers clear of Tehran, Moscow and Beijing and which, more importantly, not only dovetails but holds the prospects of augmenting and even strengthening the US’s containment strategy towards Russia and Iran.

Thus, the US has begun developing an altogether new land route through the southern Caucasus to Afghanistan, which doesn’t exist at present. The US is working on the idea of ferrying cargo for Afghanistan via the Black Sea to the port of Poti in Georgia and then dispatching it through the territories of Georgia,Azerbaijan, Kazakhstan and Uzbekistan. A branch line could also go from Georgia via Azerbaijan to the Turkmen-Afghan border.

The project, if it materializes, will be a geopolitical coup – the biggest ever that Washington would have swung in post-Soviet Central Asia and the Caucasus. At one stroke, the US will be tying up military cooperation at the bilateral level with Azerbaijan, Kazakhstan, Uzbekistan and Turkmenistan.

The US will have virtually dealt a blow to the Russia-led Collective Security Treat Organization (CSTO) and the Shanghai Cooperation Organization (SCO). Not only will the US have succeeded in keeping the CSTO and the SCO from poking their noses into the Afghan cauldron, it will also have made these organizations largely irrelevant to regional security when Kazakhstan and Uzbekistan, the two key players in Central Asia, simply step out of the ambit of these organizations and directly deal with the US and NATO.

Therefore, the US is making a determined bid to render Russian diplomacy on Afghanistan toothless. Interestingly, the US has allowed NATO at the same time to negotiate with Russia for transit route facilities, which Moscow will be hard-pressed to refuse.

Washington has certainly done some smart thinking. It is having the best of both worlds – NATO taking help from Russia with the US at the same time puncturing the CSTO and undercutting Russian interests in the Caucasus and Central Asia.

Ever since the conflict in the Caucasus (Russia – Georgia conflict) in August, the US has maintained a continuous naval presence in the Black Sea, with regular port calls in Georgia. The indications are that the US is planning a carefully calibrated ground presence in Georgia as well. Talks are in the final stages for a US-Georgia Security and Military Agreement.


Another dramatic fallout is that the proposed land route covering Georgia, Azerbaijan, Kazakhstan and Turkmenistan can also be easily converted into an energy corridor and become a Caspian oil and gas corridor bypassing Russia. Such a corridor has been a long-cherished dream for Washington. Furthermore, European countries will feel the imperative to agree to the US demand that the transit countries for the energy corridor are granted NATO protection in one form or the other. That, in turn, leads to NATO’s expansion into the Caucasus and Central Asia.

RUSSIA is not expected to keep quiet and watch US intrusion into its former territories passively. The chief of the General Staff of the Russian armed forces, General Nikolai Makarov, just about lifted the veil on the geopolitics of the Afghan war to let the world know that the Bush administration was having one last fling at the great game in Central Asia. Russia, it seems is about to transfer the S-300 missile defense system to Iran. S-300 is one of the most advanced surface-to-air missile systems capable of intercepting 100 ballistic missiles or aircraft at once, at low and high altitudes within a range of over 150 kilometers. As long-time Pentagon advisor Dan Goure put it, “If Tehran obtained the S-300, it would be a game-changer in military thinking for tackling Iran. This is a system that scares every Western air force.” Russia stated that giving Iranians the S-300 will avoid “wars” in the region. More than US, the Israelis view this as a threat to their existence. the head of political-military policy in the Israeli Defense Ministry, Major General Amos Gilad, was traveling to Moscow with a demarche that Russia should not transfer S-300 to Iran. If things are not sorted out on the Iran front, Israel may have a go at Iran’s suspected nuclear sites – ALONE.

All this is expected to unfold in India’s backyard and soon.

The veiled threat of reopening the “Kashmir file”, which is patently aimed at keeping India at bay, also serves a useful purpose. Plainly put, the US faces a real geopolitical challenge in Afghanistan if only a coalition of like-minded regional powers like Russia, China, Iran and India takes shape and these powers seriously begin exchanging notes about what the Afghan war has been about so far and where it is heading and what the US strategy aims at. So far, the US has succeeded in stalling such a process by sorting out these regional powers individually.

Was India getting too close to Russia and Iran for USA’s liking and was the Mumbai blast a timely reminder for India not to meddle in the “GREAT GAME”?

Grand Strategy: Opium Wars

Daily Titan Assistant Opinion Editor

AfghanistanMap of Afghanistan’s opium poppy distribution. Shaded areas signify provinces demonstrating significant opium cultivation. Courtesy of the United Nations Office on Drugs and Crime.

Afghanistan is not just a bloody death trap; it is also a breeding ground for narcoterrorist activities. Narcoterrorism, the act of supporting terrorist activities by drug trafficking, and vice versa, provides hundreds of millions of dollars worth of support for violent insurgencies. To prevent the spread of both terrorism and illegal drug trafficking, the United States and its coalition partners must eradicate opium production in Afghanistan.

Given that Afghanistan ranks an abysmal 155 out of 169 in the United Nations Human Development Index (a ranking only slightly above hellholes such as Niger and Zimbabwe), it should not be surprising to find that the country is rife with illegal drug trade and violence. Much of the opium produced in Afghanistan eventually finds its way to the United States, often in the processed form of heroin. U.S. government figures demonstrate that a majority of the world’s heroin originates from the region.

One unfortunate effect of our invasion of Afghanistan was the resurgence of the lucrative poppy crop, which was nearly eradicated by the Taliban prior to the U.S. invasion in 2001. An enlightening article published in The New York Times in May of 2001 reports that “the first American narcotics experts to go to Afghanistan under Taliban rule have concluded that the movement’s ban on opium-poppy cultivation appears to have wiped out the world’s largest crop in less than a year.” Unfortunately, the invasion and subsequent occupation wreaked havoc in the short-lived drug-free zone. Today, the western and southern provinces of Afghanistan are overrun with poppy farmers paying protection money to the Taliban.

According to a 2011 report by the United Nations Office on Drugs and Crime (UNODC), the top two reasons that farmers cited for cultivating opium are the “high sales price of opium” (77 percent of respondents) and “poverty” (19 percent of respondents). Obviously, the farmers’ interest in growing opium is primarily economic.

These UNODC statistics suggest the best way to combat opium trade would be to increase economic opportunities and prosperity, which is simply not happening in the western and southern parts of Afghanistan. This is made doubly difficult since money made through growing legitimate crops (such as wheat) simply cannot compare to the massive profits that can be obtained by cultivating opiates for the black market.

Another UNODC report states that opiates from Afghanistan account for “almost 100 percent of the illicit opiates consumed in Iran, Pakistan, Turkey, Kazakhstan, Turkmenistan, Kyrgyzstan, Tajikistan, Uzbekistan, Azerbaijan and the Russian Federation.” Naturally, drug trafficking and the organized criminal and terrorist activities that it sustains will have negative implications on regional security.

Further complicating the situation is the fact that the Islamic Republic of Iran is located directly on Afghanistan’s western border. UNODC World Drug Report 2011 found that Iran accounts for 89 percent of world opium seizures and 41 percent of heroin and morphine seizures — by a large margin the highest in the world. In order to prevent the illegal trafficking of opiates into its borders, Iran has placed defensive measures (including minefields and other military technology) on its border with Afghanistan. This has proven ineffective, as thousands of Iranian police officers have been murdered while attempting to keep out illegal drugs.

If the United States and allied powers continue to allow opiate production and smuggling to run rampant in the west and south of Afghanistan, it is possible that an international incident might develop if Iran decides to militarily intervene in the portions of Afghanistan nearest to its border. Fortunately, probably because of the large population currently addicted to opium, the Iranian leadership seem to be cooperating with international efforts to control transnational drug trafficking.

In addition to hopelessly hooking millions of people on the drug, opiate trade in the region primarily serves to finance and further strengthen the position of the Taliban. The Taliban is led by a rather pretentious man named Mullah Mohammad Omar, who has claimed the title of Amir al-Mu’minin (Commander of the Faithful). Mullah Omar announced in an interview with the BBC that “the real matter is the extinction of America. And, God willing, it will fall to the ground.”

Enriching and empowering fanatics such as Omar will be the inevitable result of failing to control narcoterrorist activities. If the United States is unable to eradicate opiate production in Afghanistan, we will see the continued strengthening of America’s enemies, in addition to measurable increases in the trafficking of highly addictive, life-shattering narcotics. End opium poppy growth in Afghanistan, and we will see a decrease in the availability of heroin in our own localities. Failure is not an option.

A village Mullah walks through a poppy field in Kandahar

British and US accused of poppy plague warfare in Afghanistan

Three Turkish Frigates Patrol Drilling Site, Norwegian Exploration Vessel Stands By

Cyprus to start second round of licensing

• Mon, Sep 19, 2011

Phileleftheros reports that just a few days before exploration drilling for hydrocarbons start, the Cyprus Government has decided to proceed to the second round of licensing for Blocks in its EEZ.

This is expected to be announced in the next few days and will involve the other Blocks of Cyprus’ Exclusive Economic Zone.

According to the paper’s information, President Christofias informed about this decision the party leaders during his informal meeting with them last Friday.

He also briefed them that in the area where the exploration is going to take place three Turkish frigates are patrolling but without causing any problem. 

Christofias mentioned that in the northern part of Cyprus all leave of the military personnel has been cancelled. 

It is obvious, he said, that the Turks will go ahead with their own explorations west of Cyprus, something which is confirmed by the presence of a Norwegian ship in the area. 

Cyprus, he added, is open communication with Greece at all levels and developments are closely monitored.

According to informed sources the view of both the government and the political parties is that Cyprus should start preparing the ground- depending on developments- for recourse to the UNSC in connection with Turkey’s threats.

Nicosia appears to be satisfied with the stand of foreign governments on the issue of exploration drilling.
— Copyright © Famagusta Gazette 2011

Signing the Agreement On South Stream, Nabucco Killer

Vodpod videos no longer available.

Offshore – TAP – Trans Adriatic Pipeline Laying, posted with vodpod

[The signing of the South Stream documents may prove to be the death certificate on the Ukrainian gas system, as well as the NABUCCO system.]

An opportunity that can’t be missed


A shareholders’ agreement on the offshore part of the South Stream pipeline has been signed at the investment forum in Sochi, with the major project parties – Russia, Italy, France and Germany – moving into a new phase of its implementation.

Charged with building this part of the pipeline will be the South Stream Transport company to be established on the basis of the document. The string will originate in the Russian port of Novorossiysk to run across the Black seabed to Varna, Bulgaria, where the network will be divided into two systems. Its northern line is designed to reach Austria via Serbia, Hungary and Slovenia, while the southern one has Italy as its final destination. Branches are also planned to be built in Croatia, Macedonia, Greece and Turkey. Alongside the Nord Stream pipeline laid across the Baltic Sea, this project will cover all of Europe’s energy requirements. This, in its turn, will straight away take the issue of so-called gas wars with Ukraine off the agenda, according to General Director of the National Energy Institute Sergei Pravosudov.

“Taken together, South Stream’s planned capacity of 63 billion cubic meters per year plus the 55 billion of the Nord Stream will shut down the Ukrainian gas transit corridor. Kiev’s gas transport system may be safely sold for scrap after the South Stream is launched in 2015,” Sergei Pravosudov believes.

Official Kiev seems to be already considering such an option. The day before, that country’s Prime Minister Nikolay Azarov said the government was dissatisfied with the way Europe and Russia used its gas transport system and is ready to consider its temporary shutdown. Earlier, President Viktor Yanukovich suggested that Moscow waive the project of South Stream’s offshore part and lay a pipe via Ukrainian territory. All these are signs of panic, says expert Andrei Meshcherin.

“This is a plainly provocative political statement. All specialists are perfectly aware that the South Stream is, among other things, aimed to supply Russian gas bypassing Ukraine. What is the good of it if we once again start pumping fuel via its territories?”

However, the European Commission has apparently not yet realized the benefit, with its energy chief Günther Oettinger repeatedly stating that the South Stream impedes the implementation of Europe’s Nabucco and Trans-Caspian projects. Brussels is also threatening to leave the South Stream out of the list of exceptions to EU’s Third Energy Package, which bans a country from selling gas while simultaneously owning a pipe. There is a need to protect strategic projects like the South Stream from such challenges, stresses director of Institute for Energy and Finance Vladimir Feigin.

“This pipeline will increase the flexibility and security of gas supplies. Europe will be provided with attractive terms if it comes to realize this finally. No one has so far managed to build powerful systems under the Third Energy Package. Even investors from the second one, who saw those terms as inappropriate, demanded exceptions for themselves. In other words, Europe has to decide whether it is going to speculate or wants higher supplies,” Vladimir Feigin says.

The document signed in Sochi also outlines partnership interests of international participants. Italy’s ENI, Germany’s Wintershall (a wholly-owned BASF subsidiary) and France’s EdF (Électricité de France) will hold an overall 50 percent, with Gasprom having the rest. South Stream’s Chief Executive Officer Marcel Kramer of Holland said that the project is based on both strategic importance and commercial benefits that cannot be missed.


Oligarch Knock-Down Drag-out On Russian TV

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MOSCOW – A Russian tycoon punched a fellow billionaire on a television panel show after a discussion on the financial crisis degenerated into petty name-calling.

Alexander Lebedev, a former KGB operative and owner of two major newspapers in Britain, wrote on his blog that property developer Sergei Polonsky had earned the clobbering by behaving abusively throughout the recording of the program.

In a preview clip posted on the NTV channel’s website before the show aired yesterday evening, Polonsky is seen saying that he sometimes felt like “bashing [Lebedev] in the face,’’ prompting the newspaper owner to jump to his feet.

After sitting back down, Lebedev then swiftly delivered a sucker punch, sending Polonsky tumbling to the ground. The clip then shows Lebedev squaring up to a stunned Polonsky as the presenter puts himself between the two men.

On his blog, Lebedev displayed no sign of contrition.

“Unfortunately, NTV viewers cannot see how Polonsky behaved during the one-and-a-half-hour recording. Everybody could see that he was absolutely off his head,’’ Lebedev wrote.

After the recording, Polonsky complained he had sustained a hand injury and that his jeans were ripped. That drew only mocking incredulity from Lebedev.

“Now, he’s showing his ripped pants, and it is hard to say anything about that. He was hit in the face and he’s showing off a hole in the backside of his trousers. Strange,’’ Lebedev wrote.

Scuffles and heated exchanges between guests are common on Russian political discussion shows.

© Copyright 2011 Globe Newspaper Company.